CEOSPEAK: Make our cities smart
T he Hon'ble Prime Minister has set out a vision of a 100 Smart Cities. In his inimitable style, he has set us a 4in-1 : a challenge, an opportunity, a direction, and, a metric of success. India is in the throes of rapid urbanisation, having registered growth rates in excess of 31% in each of the last two decades. Experts have spent considerable time and resources forecasting the pace of the demographic transformation in our urban landscape. Without getting into the specifics, suffice it to say that the challenge is gargantuan. Some 200 million Indians are likely to migrate into urban areas over the next two decades! This level of migration, over a short span, will be cataclysmic if we do not respond in mission mode. Indeed, the urban dividend that we hope to reap as a country from the momentum of this migration will turn into an urban nightmare : widespread social, economic and political unrest, low productivity, and, unsustainable services on the back of large numbers of the unemployed and underserved.
Unmanaged urban growth will strangle our economy, stifle growth, and, make India an undesirable destination for global investment. The Smart cities challenge is thus to define the initiative in a manner that addresses these issues. If we do so, the Smart Cities challenge will provide both public and private sector, domestic and global companies, huge opportunities for investment and growth. Through the fulfillment of the Smart cities opportunities, the quality, availability, and, cost effectiveness of services to ordinary citizens would improve and the direction would be set for continuous improvement in the future. Thus the metric of success in the Smart Cities program is evident : a smart city initiative is one that creates an environment that encourages growth in urban employment, productivity, and, quality if life. Credit to Prime Minister Modi for succinctly galvanizing our collective focus on a transformation that could realize India's potential and meet the world's expectations
Cities have been universally recognized as the main engines of growth for the future. Their contribution to the country's GDP is estimated to rise from 60% today to nearly 75% in the next 15 years. A McKinsey study estimates that cities will generate 70% of all new employment. The JNNURM was the first nationwide reform effort that tried to
address these challenges and enhance the quality of basic municipal services and governance in 65 cities. The 100 Smart Cities programme is the next generation of reforms that could take forward the unfinished agenda of the previous urban mission. This would be supplemented by the AMRUT scheme across 500 cities
Indian cities, in contrast to most others in the world, are notoriously poor in their quality of services, environment, productivity, planning, and in their ability to support rapid urbanization. Improving it to become the engines of growth will require massive investments. Whilst the Prime Minister has done his bit of setting the vision and positioning the initiative globally, it is now our turn to convert this vision into reality. The move to transform our cities has certainly ignited the imagination of stakeholders both in India and abroad : infrastructure players, technology solution providers, financing institutions, etc, are all gearing up to participate in the smart cities initiative. However, to get these players into the sector and to mobilize the resources will require significant effort at the policy, regulatory, financing framework levels, amongst others.
Land policies to promote
Urban Renewal : Redevelopment would be an essential feature of Smart Cities. Master Plans are promoting densification and intensive use of scarce urban land through Transit Oriented Development (TOD) policies, which would also help to replace old and unsafe housing stock. Communities are being encouraged to take the initiative to avail of higher FSI and rebuild as per modern planning principles, but one of the major challenges is in evolving consensus amongst the members themselves. We need to evolve policies and templates for such ideas to become implementable on the ground : architecturally significant buildings need to be preserved, the needs of the homeless needs to be addressed along with those with homes, land costs need to come down, infrastructure and utilities need to be modernized, the urban environment has be significantly improved, and, public spaces needs to be created and protected. These issues have been debated at length : we need to implement and enforce these rules urgently
Technology and Innovation : These are commonly considered to be essential components of a Smart City. Significant progress is claimed to have been made in the developed countries in advancing concepts in urban mobility, water and sanitation, energy and environment management, sustainable habitats, urban governance, etc. Indian cities have the opportunity to leapfrog, provided they carefully select proven, customized solutions suitable for our environment on a life cycle cost basis as against the L1 approach currently in vogue
Financing : Smart City initiatives would comprise a basket of projects that are amenable to PPP, and others that need to be necessarily funded by the Government. SEBI's approval of the framework for issuance and listing of municipalities bonds, and higher devolution of funds from the Centre to the States are encouraging developments. But City Authorities need to complement this by enhancing their own revenue bases through land monetization strategies, and levying user charges on cost recovery principles. This would also help them to access capital markets, pension funds, sovereign funds and assistance from bilateral and multilateral agencies
Procurement: Our public
procurement system largely works on lowest front-end cost method, which reflects a short term view of infrastructure. To allow induction of latest technology and innovation, we must switch to a more scientific system of procurement based on meeting key performance indicators over the project life, and corresponding life cycle costs. Further, to reduce the inefficiencies of multiple agencies working in piecemeal manner, city authorities could try bundling different services under integrated bid packages as far as possible National Urban Knowledge
Repository : Last, but not the least, we need to create a knowledge-exchange platform for sharing experiences, best practices, and, technology evaluation amongst different stakeholders. Housed in the Ministry of Urban Development, Government of India, it should be made accessible to all stakeholders. Most ULBs, particularly the smaller ones, could immensely benefit from such a platform The Smart City initiative provides a unique opportunity to create a transformational impact in the context of urban development of India. With global attention focused on India, we would be able to access a wide range of know-how and expertise, complemented by long term funding to successfully retrofit and rebuild our cities. And across the diversity of 100 cities, we would find our own solutions and replicable templates, which can then be applied to the next 500 towns. The stakes are high : getting the Smart Cities initiative right will drive India's GDP to double digits and create the millions of new jobs that this country desperately needs.